NEW YORK (CBS.MW) - U.S. stocks posted modest gains Friday as oil held steady around the $48 a barrel level, with investors digesting a larger-than-expected fall in existing homes sales, but a broadly positive durable goods report.

The Dow Jones Industrial Average was last up 7 points, at 10,045, after being climbing as high 10,061 prior to the weak housing data.

Within the benchmark index, Home Depot and Intel were two of the most notable gainers, rising by 1 percent apiece.

The Nasdaq Composite rose 6.3 points, to 1,892, while the S&P 500 index eked out a 1.6 point gain, to 1,109.97.

"The key factor remains oil," said Peter Cardillo, chief market strategist, at S.W. Bach. "Unless we really come down sharply on the price of oil, I suspect we're going to have a mixed session for most of the day."

At the same time, the recent sell-off in stocks has brought the major indexes to the lower end of their current trading range.

"We might be able to bounce off those levels," said Cardillo.

Data offers mixed signals

Two key economic reports gave mixed signals on the current state of the economy.

The National Association of Realtors reported that U.S. existing home sales fell a much larger-than-expected 2.7 percent in August to 6.54 million units on a seasonally adjusted annual basis.

But the latest durable goods report issued ahead of the bell provided some cheer for investors.

Total orders for new durable goods fell a larger-than-expected 0.5 percent in August, held back by a 42.8 percent drop in orders for civilian airplanes,

(NEW YORK) A REGULATORY report into Fannie Mae, the US government-chartered institution that guarantees payment on about $1,900 billion of US mortgages, has uncovered accounting problems that "raise doubts" about the "safety and soundness of the enterprise".

The Office of Federal Housing Enterprise Oversight, Fannie Mae's chief regulator, delivered a report to Fannie Mae's board on Monday, adding: "The matters detailed in this report are serious and raise doubts concerning the validity of previously reported financial results."

The US Securities and Exchange Commission has begun an inquiry into accounting problems at Fannie Mae. This comes after concerns were raised by the Office of Federal Housing Enterprise Oversight, whose eight-month investigation produced alleged evidence of expenses being shifted off the balance sheet to improve current results. The report said that honesty about results had been sacrificed in favour of paying executive bonuses, and that internal controls were slack.

The report gives credence to a warning this year by Alan Greenspan, Chairman of the Federal Reserve, who cautioned that Fannie Mae's size could put the financial system in peril. Analysts have said that American taxpayers could face a huge bill if the enterprise came undone.

The board "takes the report seriously and is working with (its regulator) to resolve these matters", Fannie Mae said. It has formed an internal investigative committee and hired Warren Rudman, the former New Hampshire Senator and now a partner at the law firm Paul, Weiss, Rifkind, Wharton and Garrison, as counsel.

NEW YORK (CNN/Money) - The Federal Reserve raised a key interest rate a quarter-percentage point Tuesday in an ongoing effort to raise lending rates from the lowest levels in more than 40 years.

The central bank's policy-makers unanimously agreed to raise their target for the fed funds rate, an overnight lending rate that influences rates throughout the economy, to 1.75 percent from 1.5 percent.

Though it was the third such hike this year, the fed funds rate is still at a level not seen consistently since 1962.

In the closely watched statement accompanying its release, the Fed repeated its view, first expressed on June 30, that it could probably keep raising rates at a "measured" pace.

"After moderating earlier this year partly in response to the substantial rise in energy prices, output growth appears to have regained some traction, and labor market conditions have improved modestly," the Fed wrote. "Despite the rise in energy prices, inflation and inflation expectations have eased in recent months."

WASHINGTON, Sept. 22 - Putting aside efforts to control the federal deficit before the elections, Republican and Democratic leaders agreed Wednesday to extend $145 billion worth of tax cuts sought by President Bush without trying to pay for them.

At a House-Senate conference committee, Democratic lawmakers abandoned efforts to pay for the measures by either imposing a surcharge on wealthy families or closing corporate tax shelters.

"I wish we could pay for them, but this is a political problem and we have people up for re-election,'' said Representative Charles B. Rangel of New York, the senior Democrat on the House Ways and Means Committee. "If you have to explain that you voted for these tax cuts because they benefit the middle class and against them because of the deficit, you've got a problem.''

Many political pundits consider passage of this legislation to be a potential feather in President Bush�s cap that could widen his lead over Senator Kerry.

Should the bill pass, it would cost the US Treasury an initial loss of $145.7 billion in revenue over a 10-year period, according to a committee estimate, that, in theory, would more than be made up from a stimulated economy.

Included in the measure is the $1,000 per child tax credit, tax breaks for married couples and the continuation of an expanded 10 percent tax bracket, resulting in lower tax bills for taxpayers.

WASHINGTON, Sept. 21 - The Commission on Presidential Debates told the Bush and Kerry campaigns Tuesday that it could not accede to their unusual request that it sign by Wednesday their 32-page agreement detailing parameters for the debates.

First of all, the commission said, it has to determine which candidates have enough support in the polls to qualify for the debates, which it does not plan to do until Friday. Regardless of the timing, the new requirement that the independent commission as well as the four journalists selected to moderate the debates sign onto the pact between the two candidates has made some people involved in the process uncomfortable.

The memorandum of understanding negotiated by the campaigns also includes an unusual level of prescriptions, particularly over the town-hall-style debate scheduled for Oct. 8, which some say undermines the idea of a voter-driven discussion. It states several times that audience participation, outside the forum questioners, is prohibited, and calls for visible timing lights, so viewers will know if someone is filibustering.

"The interesting thing here is the lengths they go to to restrict the questioning at the town hall," said Martin Plissner, a debate expert and former CBS News political director. "It makes the whole process look kind of ridiculous. It will have to be extremely mechanical."

NEW YORK (Dow Jones)--Comex Dec gold futures made an early charge to $412
per ounce and 14-day highs Tuesday morning on fund and dealer buying sparked
by U.S. dollar weakness, but lost ground thereafter toward the $410 area as
the initial buying spree waned.

The U.S. currency sank against the euro on investor selling ahead of the
Federal Open Market Committee's decision on interest rates due around 1400 ET
(1800 GMT) after the Comex floor session ends.

A break in spot gold prices above recent resistance levels around $408 per
ounce also drew a hefty dose of chart-following fund buying just ahead of the
Comex open to fuel the early surge in Dec futures.

Once that buying passed Dec futures retreated on light local and fund
profit taking, and dealers agreed that additional light selling and price
slippage could be seen over the remainder of the session.

By 1059 ET (1459 GMT) Dec gold was quoted around $410.20-$410.40.
Dec silver followed gold's lead and charged to 10-day highs of $6.38 early
on a brisk fund-led opening before easing slightly to the $6.34-$6.36 region
by late morning.

Silver will likely continue looking to gold for direction, with the $6.40,
$6.42 and $6.45 levels eyed to the upside and $6.30 and $6.28 below current
levels.

Nymex Oct platinum also started strongly but receded from its early high
of $856 to the $849 area by late morning in line with the balance of the
complex.
http://www.dowjones.com

UNITED NATIONS (AP) - President Bush delivered an unapologetic defense of his decision to invade Iraq, telling the United Nations Tuesday that his decision "helped to deliver the Iraqi people from an outlaw dictator." He appealed to the world community to join together in supporting the new Iraqi interim government.

Bush's speech to the U.N. General Assembly, running just 24 minutes, also included an appeal for intensifying the global war against terrorism and for focusing energies on humanitarian missions, from helping to end the bloody violence in Sudan to combating AIDS in Africa.

Two years after he told the world body that Iraq was a "grave and gathering danger" and challenged delegates to live up to their responsibility, Bush strongly defended his decision to lead a coalition that overthrew Saddam Hussein's regime without the blessings of the U.N. Security Council.

He spoke shortly after U.N. Secretary-General Kofi Annan opened the 191-nation gathering with a warning that the "rule of law" is at risk around the world. Annan last week asserted that the U.S.-led invasion of Iraq "was illegal" because it lacked such Security Council approval.

CAIRO, Egypt (AP) - A Web site posting Monday claimed that Abu Musab al-Zarqawi's group has beheaded one of the American hostages in Iraq and that others would soon be killed. The claim could not be verified.

The short statement was posted by a Web site contributor using the pseudonym Abu Maysara al-Iraqi, who has put up past statements signed in the name of the Tawhid and Jihad group.

The posting promised video proof "soon."

Al-Zarqawi "has beheaded the first American. The group will next behead the others," the statement said.

The reliability and authenticity of such statements, videos and pictures, which appear frequently on Internet sites known for their Islamic content, cannot be known for certain.

In July, a statement was posted by what was described as the "media department" of Tawhid and Jihad saying that all of the group's statements would only be posted through al-Iraqi.

In a previous videotape issued in the name of Tawhid and Jihad, militants threatened to behead Americans Jack Hensley and Eugene Armstrong and Briton Kenneth Bigley on Monday unless Iraqi women are released from two U.S.-controlled prisons in Iraq. The brief posting did not say which American had been killed.

The three construction contractors were snatched Thursday from their Baghdad home.

The U.S. national debt has now topped 7 TRILLION --
causing the buying power of the U.S. dollar to drop
to just 2 CENTS since the FED began printing in 1913.

To be more exact, Richard Daughty (aka Magumbo Guru) calculates... "The Treasury Gross Public Debt took another big rise of, and I hope you are sitting down for this, $22 billion last week alone! Total federal debt now sits at, let me check that number again, $7,376.5 billion, which is only a lousy $7.5 billion short of the statutory limit of $7,384 billion." -"A Hurricane of Debt" 9-14-04

No wonder twenty-five cent gasoline is now two dollars!
No wonder a new car that was under $10,000 is now $30,000.
No wonder no presidential candidate can stop inflation.

Whoever wins the 2004 race will become the first U.S. president
in history to confront what experts across the political spectrum
describe as an impending "fiscal catastrophe" right around the corner.

Astronomical federal debt, coming due as the Baby Boom generation
collects Medicare, Medicaid and Social Security, is enormous enough
to swamp the promises both candidates are making to voters, whether
for tax cuts, health care, 40,000 more troops or anything else.

"Chilling" and "infeasible" are the words U.S. Comptroller General
David Walker uses to describe the budget outlook. Perhaps the best word to describe America's looming debt/credit
crisis is irresponsiblility -- at all levels.

The size, role, and intrusion of today's Federal government
would be unfathomable from our founder's perspective. It
was the dream of our forefathers that "government" would
begin inside each citizen, or self-government. That
means putting the future ahead of the present.

My question?: How will our kids and grandkids
survive the coming inflation - when the U.S. dollar
collapses under the weight of OUR generation's
entitlements... deficits... and DEBT! It will begin
to happen by 2010, in just 6 years, unless something
is done now.

Debt and credit has become America's drug of choice.
"Buy now - pay later," the new mantra of the last 40
years, has now put a heavy price to our money system,
our communities and our families.

The modern disintegration of the family, teenage suicide,
rising divorce rates and bankruptcy are just a few of
the visible casualties of putting present wants before
future needs and can be traced back to debt/credit abuse.

The coming presidential debates have been reduced to a
series of glorified bipartisan news conferences, in which
the Republican and Democratic candidates merely recite
prepackaged soundbites to fit 90-second response slots.
Peter Peterson, author of RUNNING ON EMPTY
recently told FORTUNE ...

"There is an important question that,
if asked of either presidential candidate during the upcoming
debates, is guaranteed to elicit an evasive nonanswer. It goes
something like this: 'All the fiscal experts agree that recent
tax cuts and surging pension and health-care spending will
trigger wildly unsustainable deficits as the baby boom retires.
The deficit explosion, they all say, will occur whether or not
your announced program for the next four years is implemented.
Do you have any concrete strategy for closing that fiscal gap?
If so, would you share it with the American people?'" -FORTUNE, 8-23-04

I say let's admit that debt is America's greatest drug
problem today and follow the steps of any good rehab center
and start living within our means.

Sadly, few are prepared to face the coming debt crisis with
a financial house that is built on anything more than paper
assets, or real estate valuation - on paper.

As for my clients, they sleep a lot better with a solid foundation
of historic U.S. gold and silver coins in their portfolio to provide
the capital preservation, liquidity and growth needed for the
perilous days ahead.

Gold is the monetary anti-drug because it does not feed the credit
habit -- it is a 100% pure asset!

Sept. 23 (Bloomberg) -- Rip Van Bondtrader, awakening this week from a one-year slumber, would have a hard time knowing there had been a 180-degree shift in the inflation outlook or a 70 percent surge in oil prices since his head touched the pillow.

Twelve months ago, the U.S. Federal Reserve proclaimed that ``the risks to its outlook for inflation over the next several quarters are weighted toward the downside,'' and that monetary policy was likely to be on hold for a ``considerable period.'' Ten- year Treasuries yielded a bit more than 4 percent.

This week, the Fed accompanied its third rate increase in as many months by repeating August's statement that ``with underlying inflation expected to be relatively low, the committee believes that policy accommodation can be removed at a pace that is likely to be measured.'' Ten-year Treasuries yield, well, a bit more than 4 percent.

What's wrong with this picture? If Treasuries at about 4 percent are justified when the Fed is concerned about deflation, surely bonds have to offer an additional risk premium when the U.S. central bank is tightening monetary conditions and has removed the deflation word from its lexicon?

The Fed raised its target federal funds rate on Tuesday by a quarter-point to 1.75 percent. In response, investors drove 10- year Treasury yields down by 2 basis points, to 4.04 percent.

``It always makes us nervous when a bond market rallies on the back of a rate hike,'' says Paul Robinson, a senior salesman of interest-rate products at Man Group Plc. ``Come the end of the year, it's going to be tough to explain to your investors why you were so long a market this expensive if it sells off.''

Let's see... gold is still where we left it, a little over
$400. Stocks are where they've been for a very long time,
too - a bit over 10,000. The dollar? No change there
either.

Only bonds have moved - opposite to what everyone expected.
It was a cinch that bonds would fall when Alan Greenspan
began his tightening campaign. Grant's Interest Rate
Observer, a publication that has been observing interest
rates for more than 10 years, thought it observed a major
top in bonds this past June. Interest rates have been
falling (and bonds rising) for the past two decades. On
June 9, if we recall correctly, Grant's thought it observed
the end of the trend. From here on out, said the interest
rate observers, bonds were expected to go down and
inflation rates to rise.

Maybe.

But it looks to us as though the trend towards lower yields
and higher bond prices is still going on. The everyday low
prices at Wal-Mart get lower every day. And now come
reports that consumers are slacking off. Lower demand means
still lower prices... and fewer jobs... a real estate
bust... and lower bond yields. It means a long, soft, slow
slump.

Japan passed an important milestone recently; the number of
Japanese over 65 rose to more than 25 million. The same
trend is under way throughout the developed world... and in
China, too. Older people do not spend as much money. They
do not innovate. They do not borrow. As people grow older
and slow down, so does the economy in which they live.

Of course, we could be wrong about this, as we are about so
many other things. But that's been our guess for the last
four years; we'll stick with it, at least until people
start laughing at us.

If we're right, what will it mean for stock prices, gold
and the dollar?

Stocks will go down, just as they did in Japan. The bear
market in stocks began in early 2000. Most likely, it will
continue until stocks are once again selling at 5-8 times
earnings, that is, when the Dow falls below 5,000.

It is harder to say what will happen to gold and the
dollar. We buy gold as insurance. In a sharp bust, people
will seek safety by buying gold and the price will go up.
But in the long, soft, slow slump we imagine, gold could
barely move for many years. The same is true for the
dollar. The greenback could even go up. The United States
has $33 trillion in debt; people will need dollars to pay
them off.

"This is not a day for excuses. I made a mistake, we made a mistake, and I'm sorry for it." -Anchor Dan Rather

(CBS/AP) Within the next few days, CBS News expects to name an independent panel of experts to scrutinize its reporting of President Bush's National Guard service after its defenses for airing the explosive story crumbled.

Eleven days after questions surfaced about CBS News Anchor Dan Rather's 60 Minutes report, the network apologized Monday and said it could not vouch for the authenticity of documents impugning the president's Guard service.

"I want to say, personally and directly, I'm sorry," a subdued Rather said Monday on the CBS Evening News.

CBS' original Sept. 8 report featured an interview with former Texas Lt. Gov. Ben Barnes, a Democrat who claimed that in 1968 he pulled strings to get young Mr. Bush into the Guard, a popular option for men hoping to avoid the draft and possible service in Vietnam.

The piece also featured four documents purported to be memos written by one of Mr. Bush's Guard commanders, Lt. Col. Jerry Killian.

The state of the economy has always played an important role
in shaping the outcome of US presidential elections. Twelve
years ago, Bill Clinton�s campaign mantra, �the economy, stupid,�
focused the debate on economic issues as never before. But
history is replete with many other examples when economics
emerged as a critical swing factor in America�s presidential
sweepstakes. Does that history offer any clues for the outcome
of Campaign 2004? Conversely, does the political cycle hint
at what to expect in the economy over the next four years?

Not surprisingly, President Bush and Senator Kerry are following
very predictable patterns in their respective assessments of
economic conditions. The incumbent has argued that America has
�turned the corner.� The challenger maintains that there�s no
corner in sight.

This is a classic example of the politics of simplification �
sidestepping the big issues and framing the debate around
alternative perceptions of economic security. In my view,
Campaign 2004 has barely paid lip service to America�s biggest
economic problem.

The elephant in the room that the politicians continue to
sidestep is the profound shortfall of national saving � the
sustenance of future growth and prosperity for any economy.

The numbers speak for themselves: The net national saving rate �
the combined saving of households, businesses, and the government
sector � fell to a record low of 0.4% during 2003 and has since
rebounded to only 1.9%. It is important to emphasize the �net�
aspect of this calculation � calculated by stripping out the
depreciation charges that go to the replacement of worn-out
capital. The net national saving rate shows the domestic
saving left over to fund the growth in net productive capacity.
And basically there isn�t any. Never before has the modern-day
US economy been so devoid of domestically-generated saving.

Here�s where the plot thickens. Lacking in domestic saving �
but still wanting to grow in a world where saving always equals
investment � the US must import surplus saving from abroad.
That means America has no choice other than to run large current-
account and trade deficits to attract that capital. A record
5.7% current-account deficit in 2Q04 hammers that point home.
It is not an accident. Nor is it traceable to unfair global
competition, as the Democrats maintain. Nor can it be swept
aside as merely a by-product of the world�s growth deficiency,
as the Republicans argue. This is, first and foremost, America�s
problem � a direct outgrowth of our own homemade saving gap.

THROUGHOUT the first half of this year, investors in commodities fretted about China. They worried that its economy was in for a hard landing, as construction, property values and equities all seemed to be overheating.

Such a landing could be disastrous for commodities companies, which have profited from some of the strongest global demand for resources in decades. Much of that demand has been driven by China, which now accounts for 30 percent of world coal consumption and 40 percent of steel consumption.

So far, however, the fears have generally not been borne out. Loan growth in China slowed by 7 percent from August 2003 to August 2004, and while inflation has remained strong, it has been below forecasts. China's consumer price index rose by an annualized rate of slightly more than 5 percent in August. Many analysts now say that China's economy will grow 9 percent this year.

As a result, said Phil Flynn, senior market analyst at Alaron Trading, a futures and options brokerage in Chicago, commodities and shares of mining companies around the world, which have posted sizable gains over the last two years, are still a solid long-term bet. "We're in an era of tremendous opportunity for commodities, and it's going to be one of the biggest sectors not for one year, but for 5, 10 years," Mr. Flynn said.

Moreover, commodity companies do not have to deal with the same headaches as manufacturing or service businesses supplying China. After all, commodities like coal are tough to pirate, and their producers do not need to worry about winning over Chinese consumers to a brand name.

What's more, said Thomas K. McKissick, managing director at TCW Asset Management and lead manager of TCW's Galileo Large Cap Value fund, commodity prices have been so low for so long that even recent demand has not bolstered supply enough. "You were in a 20-year bear market for commodities," which reduced capacity, he said.